Heat pump production policy slammed by EUA

A proposed Government heat pump production quota announced by Energy Secretary Grant Shapps could “threaten the UK with job losses and price hikes on boilers”.

The Market-based mechanism for low carbon heat proposes that British heating manufacturers’ heat pump sales should represent 4% of gas boiler sales. For every boiler sold over this quota, a £5,000 fine will be imposed on the manufacturer, setting a maximum liability of £340 million a year.

Mike Foster, CEO of the trade body the Energy and Utilities Alliance (EUA) branded the proposal “out of touch” and “absurd”:

“In current market conditions, this could see the industry having to recoup this loss by ramping up prices of a boiler, heaping more misery on already hard-pressed consumers and pushing up inflation for everyone.

“Punishing manufacturers for selling the boilers that consumers want to buy is simply irrational, and by doing so, manufacturers may be left with no choice but to raise prices. If the public truly want to buy heat pumps, our members will sell them – that’s the basic law of demand and supply. Instead, this absurd production quota will force our members to import heat pumps into the UK, to avoid a fine and that’s at the expense of a British-built boiler.

“The stark reality of a plan to impose huge fines on British companies is that the jobs of British workers will be sacrificed, as manufacturers rely on cheap import units made in the EU and further afield.

“The Whitehall obsession with this Market Mechanism reaffirms our view. They are simply out of touch with the public, they do not understand even basic economics and frankly, they don’t care about the jobs of British workers.

“We have suggested a way forward on this and the UK’s Hydrogen Champion recommended the same way forward. The largest British boiler manufacturers have written to Grant Shapps asking to meet him to highlight their concerns but also offer up a solution. They are yet to hear back.”

For more information, visit www.eua.org.uk